All previous patents and literature covering direct reduction of iron oxide in a rotary hearth (Heat Fast, Inmetco and Zia) have incorporated a low to medium temperature (below 2400.degree. F. or 1316.degree. C.) preheat zone in the rotary hearth furnace (hereinafter also referred to as RHF) to dry and devolatize the pellets in order to avoid pellet exfoliation. The disadvantage of this method is that it decreases productivity due to the long time required for pellets to reach optimum reduction temperature.